Inflationary pressures affecting masses

Just as Bangladesh was recovering from the Covid crisis, the Ukraine-Russia war appeared like an omen in the country’s economy. It is a matter of concern that Monkeypox is spreading rapidly in the world, and knocking at the door of Bangladesh. 

It is slowly becoming clear that this crisis cannot be overcome very quickly. Economists are expressing worry about global production, poverty and unemployment. 

Every country’s central bank reserves are shrinking. In high inflation, other indicators of the economy also do not work well; rather, if the central bank does not succeed in the policy of monetary contraction, there is a risk of recession in the economy. In economic terms, this is called stagflation. 

One such situation is going through - the United States of America, the world economic leader. China’s economy is shrinking as it declares zero tolerance for Covid. Production in Japan and South Korea is also dropping. And the Ukraine-Russia war is intensifying the recession in the European economy.

Media reports suggest referring to World Bank, most countries are headed for recession. IMF Managing Director Kristalina Georgieva recently said the future of the global economy is bleak and uncertain. In this global context, how Bangladesh will stay well as an import-dependent country, where most of the export trade happens with Europe and America. 

Bangladesh, now, is desperate to retain central bank reserves. Instability in the dollar market, rising fuel prices, gas and electricity crisis - all in the entire economic climate is dire. The government has taken various initiatives to deal with this crisis. Cost cutting is being done through austerity. Import control of luxury goods, load shedding in the power sector and energy saving have to be decided. 

Besides, the government has advised the people to be frugal. The goal is to reduce import costs as much as possible by cutting costs in this low-cost market. So everyone has to be responsible from individual to social and even state level. 

It must be remembered that while the impact of this global crisis cannot be prevented or avoided, it is best to stay focused on domestic issues. Whether the traffickers or manipulators have any hand behind this dollar instability, it should be investigated. And even if the price of goods decreases in the global market, the price does not decrease immediately in our domestic market, this is the norm. Everyone knows about the dishonest, greedy syndicates in the foodstuff market. The government should strictly break this market syndicate and curb inflation. 

Otherwise, the cost of living for the people of the country has gone to an unbearable level, it will spread heat in the political field as well. But that is certain. The public does not want to understand so much - how many days of the country’s import expenses (three months, or five months) can be settled with the bank’s reserves? They don’t want to understand that the government can buy food grains for nine months with the current reserves in the country. They feel it in their bones - now it is not possible to fill the market with a bag like before, having to survive on less and go through austerity or have to break the savings. 

The people of the country are not used to being part of load shedding for almost a century. Again, the sudden increase in the price of fuel has increased their frustration. It is not easy for people to understand, it is a price increase or price adjustment with the global market. Day by day the subsidy cost of the government increases, and ultimately the burden on the people will be heavy.

The list of financial malfeasance that has occurred and is occurring in Bangladesh over the years is no less long. 

According to the Ministry of Energy, the country has six-month fuel reserves in the pipeline. So why try load-shedding or austerity? Is this the warning of the government? People are worried about the mega projects in the country, which have been operating with foreign loan money. So all the thoughts have now ended in their worries. In this country with a rapidly increasing number of millionaires, could the burden of the mass people be eased a little by increasing the scope of taxation by properly identifying the rich taxable people? Again, as a result of this, Bangladesh would have been saved from the shame of being at the bottom of the global list of tax-GDP ratios. 

Bangladesh is on its way to becoming the 25th economy in the world by 2035 even from this bottom in terms of tax-GDP ratio.

Bank defaulted loans, implementation of projects with high-interest loans and repeated time extensions, corruption in the electricity and health sectors, financial mismanagement, stock market hooliganism and money laundering – there is hardly any way way to deny these misdeeds? Our economic crisis can be attributed to both international and domestic reasons. The Ukraine-Russia war has just accelerated the existing weakness in our economy.

Therefore, for sustainable development and its continuity, we have to carry out reforms in all sectors of the economy. The perpetrators of financial crimes should be brought under the purview of the law. Money laundering must be stopped. Tax-GDP ratio should be increased. Good governance must be established. If it is not done soon, the crisis in the economy is certain.

Bangladesh Bank must ease the pressure on the country’s foreign exchange reserves amid a global economic crisis. Steps should be taken to stabilize the dollar crisis. 

Mere market monitoring, however, is unlikely to work now and the government must take the necessary measures to ease the suffering of the people. The authorities also must revise the prices of fuel oils to rein in inflation. 

The writer is a journalist.

He can be contacted at [email protected]